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SeaFrance Becomes 'My Ferry Link'

Tuesday 04 September 2012

Ten months after the liquidation of SeaFrance an uncertain future lies ahead for its successor.

My Ferry Link is the new name given to a resurrected SeaFrance, now run as a worker's cooperative.

According to the company, an English name for the new service was chosen as 75% of the customers are British.

The first crossings between Calais and Dover began last month, with advertised prices starting from €35 each way, or day trips return fare for the same price. The two passengers ferries - the Berlioz and Rodin - will each operate four crossings a day.

Although the passenger service has now started, it seems that discussions with the banks about funding are still in progress.

Those discussions are unlikely to be easy, for there is considerable uncertainty about the viability of the new service on a route that is already saturated.

Troubled Waters

The cross-channel route is one that since 2005 has already claimed three carrier victims - SeaFrance, Hoverspeed and SpeedFerries – all of whom succumbed to commercial failure.

Under strong political and trades union pressure the former owners of SeaFrance, SNCF, the French national railway, sunk hundreds of millions of euros into the business, in a protracted and forlorn attempt to keep it afloat, well beyond a point where there was ever going to be any chance of doing so.

It was as a result of this same pressure that SNCF also consented to substantial ex-gracia payments to the former employees of SeaFrance in order that they could buy shares in the proposed cooperative to take over the business.

Given a history of strife torn industrial relations at SeaFrance the banks will need to be persuaded that those many consider to have been the principal cause of the previous commercial failure can now run it successfully.

The new Managing Director of My Ferry Link,Jean-Michel Giguet, previously in charge of Brittany Ferries, is making all the right noises, saying that a new business culture is at the centre of their strategy, based entirely on the customer. "Je l'ai tout de suite expliqué aux équipes. Qu'il s'agisse du fret ou des passagers, le client c'est l'enjeu fondamental", he stated.

Nevertheless, the controversy surrounding the birth of the cooperative and a number of leading individuals involved in it will undoubtedly unsettle potential financial backers.

An offer for the assets of SeaFrance by DFDS Seaways was fiercely opposed by local trade union officials, much to the consternation of their national CFGT union, who accused the local branch of "a heavy responsibility" over the future of SeaFrance, due to their unwillingness to examine any other proposed solutions than their own. It finally resulted in the branch and its officials being excluded from the national union

The French national audit office, the Cour de Comptes, in a report in 2009, denounced the “exorbitant” level of influence of local trades' union officials in the running of the business, notably in the employment of staff, the high level of absenteeism and the privileges granted to employees.

The running of the local shop floor council – the comité d’entreprise – was equally criticised, with allegations of intimidation towards those who disagreed with the way it was run by local union officials.

Most seriously, in 2010 accusations of embezzlement and fraud involving leading local officials were made by the directors of SeaFrance. A police investigation into is ongoing.

Competition Investigation

Even if the banks can be persuaded to support it, My Ferry Link will still need to survive an investigation being undertaken by the UK Office for Fair Trading, following complaints of unfair competition by rival operators P&O Ferries and DFDS/LD Lines. A similar investigation is being carried out by the French competition authorities.

The problem for My Ferry Link is that the vessels that will be used on the route are owned by Eurotunnel, who purchased the commercial assets of SeaFrance from the French liquidator for €65 million. They have, in turn, leased the vessels to the new worker's cooperative.

Eurotunnel already hold a 40% market share of the cross-channel route and by now taking a share of the ferry market they may be considered by the competition authorities to be too dominant a player.

No details of the terms of the lease between Eurotunnel and My Ferry Link are publically available, but if they considered to be on anything other than a strictly commercial 'arms length' basis then Eurotunnel may well be obliged to renegotiate the terms of the lease or relinquish a share of the market.

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